Dramatic development: Israel PM, foreign minister announce Likud-Yisrael Beiteinu merger in special press conference; 'Joining forces will give us the power to defend Israel and generate social and economic change,' Netanyahu said. The two refused to take questions, did not elaborate on the make-up of the new list and did not address the possibility of a rotation.

"We face tremendous challenges and this is the time to join forces for the State of Israel's sake. That is why the Likud and Yisrael Beiteinu will run together under one ticket in the next Knesset election."

The prime minister named the challenges the new government will face including the Iranian nuclear program and the anti-terror campaign.

"There is still so much to do, primarily lowering the cost of living. After we stabilized Israel's economy in the wake of the ongoing global crisis, we can continue to focus on reducin